Abstract

In ageing societies, it is crucial to study the factors that can help maintain good cognitive functioning in later life. Previous studies have shown that having an engaged life (e.g., being employed or involved in social activities) has a positive effect on cognitive performance. In line with this strand of the literature, we consider the provision of grandparental childcare as a way to remain active in later life. Therefore, following the use-it-or-lose-it theoretical framework, we hypothesise that providing childcare on a daily basis can help older adults maintain better cognitive functioning. In particular, we focus on grandmothers, as they are the most engaged in childcare. Contrary to our hypothesis, descriptive evidence from the Survey of Health, Ageing and Retirement in Europe (SHARE) suggest that grandmothers who look after their grandchildren daily have lower cognitive scores than grandmothers who provide care less frequently. However, we show that this negative effect of providing childcare is attributable to the background characteristics of the grandparents. Using an instrumental variable approach to address the endogeneity of grandparental childcare, we find that providing childcare as a substantial and positive effect on one of the four cognitive tests we consider, verbal fluency. This positive effect is particularly strong for older grandmothers. For the other tests of cognitive functioning, no statistically significant effect of grandparental childcare is found. These results contribute to the limited evidence on the effects of grandparenting on grandparents outcomes.